IRM – Market expectations are for stable Uniform ROA, but management may be concerned about revenue, organic growth, and their business model

• Iron Mountain Incorporated (IRM:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 24.6x Uniform P/E. At these levels, the market is pricing in expectations for Uniform ROA to remain stable. However, management may be concerned about their revenue, organic growth potential, and the sustainability of their business model
• Specifically, management is confident the permanent withdrawal fees for transitioning customers from their competitors are substantial. Furthermore, they may be concerned about declining recycled paper pricing and the durability of their business model. Moreover, they may be concerned about continued headwinds to service revenue, and they may be concerned about the sustainability of their current lease-adjusted leverage ratio. In addition, they may be concerned about the value of their federal sub-agreement and about the timing of their Phoenix campus expansion. Finally, they may be exaggerating the value of their business wins in India, and they may be concerned about their customer acquisition costs.